Animal Liability: Can this come back to bite your insurance premiums?

Animal shelters provide a critical service to our society as well as to our economy. With the staggering increase in animal surrenders, rescues, and seizures, there is increased pressure on shelters and other animal rescue organizations to care for and adopt out these animals in a safe, timely manner. Along with this important task, you must be sure you have the interests of the entire shelter in mind and perform “best practices” in handling animals. Implementing these best practices will not only reduce the potential for bites or scratches, but will also help to reduce your insurance premiums.

A shelter’s general liability policy will protect the organization against 3rd party claims -including anyone entering your business premises such as potential adopters, volunteers, and even delivery persons dropping off supplies. The most common liability claims we see are animal bites and scratches. When an insurance company underwriter is approached to quote a shelter’s insurance, they will look for the following key items (to name a few):

What policies and procedures do you have in place for protecting the general public as well as volunteers that enter your premises?

What are the training procedures you have in place for volunteers?

Is your volunteer handbook current and consistent with your policy and procedures?

Do you have procedures in place for handling animals known to be aggressive or fearful?

Do you provide training or information on zoonotic disease to employees and volunteers?

Do you have adopters sign hold-harmless waivers upon adoption?

Obviously, there is no way to eliminate a 100% of the exposures that are inherent to your shelter business. The key, however, is to minimize the potential of claims from happening by implementing best practices The more documentation you can show an underwriter the more comfortable and aggressive they will be quoting your insurance! Keep in mind, if you have had a liability claims in the past, be sure to tell them how it happened and what you have done or are willing to do to prevent a similar claim from happening in the future. Also explain that you are open to their loss control consultants coming out for a tour and providing recommendations!

Implementing best practices is the first step. Be sure to communicate this to your agent so they can effectively explain to the underwriter and loss control representatives. If your shelter has best practices in place, this is the time to brag about them! It will help your bottom line on insurance premiums!

Patti Blaschka is a licensed insurance agent in the state of Wisconsin. Her insurance practice at Veitenhaus Insurance Services specializes on programs designed for the pet industry including animal shelters, rescue groups, veterinary Clinics, dog day cares and kennels. She can be reached at 414.688.8900 or pattib@veitenhaus.com.

Directors and Officers Liability Insurance: Are you at risk?

Yes, directors and officers of a for-profit and a not-for-profit organization can beheld personally liable for the decisions they make. Are you comfortable with your level of personal risk?

Being a not-for-profit does not mean that the directors of the board are immune from public scrutiny. Donors, employees, recipients of service, vendors, competitors and even the government may bring an action against the organization and its board. A corporate shield and broad by-laws offer board members and employees some protection. Unfortunately, in many cases, such protection may not be adequate.

Typical lawsuits against directors and officers include allegations of:

Mismanagement of operations or organization assets

Self-dealing and conflicts of interest

Acts beyond authority granted in by-laws

Violation of certain state and federal laws

Breach of fiduciary duties

Each of these types of lawsuits can last several years, becoming a financial burden and a continuous drain on an organization. If an organization cannot indemnify its directors and officers, or employees because of the allegations of a lawsuit, then this financial burden can become the personal responsibility of the directors, officers or employees.

Some people believe that they will have protection under their own personal umbrella. This may not be the case. Each insurance company will have their own policy language, but generally speaking, personal umbrella policies do not provide coverage if you are getting paid to sit on the board (profession, occupation or trade). If, on the other hand, you are volunteering and you receive no compensation, there may be some coverage provided, however, there is a coverage gap. Most D&O lawsuits allege mismanagement of operations or assets. In most cases, the personal umbrella policy will only respond if there are allegations of bodily injury and personal injury (things like libel, slander, defamation of character, wrongful eviction). The policy would not respond to a lawsuit that alleged mismanagement of operations or assets, for example.

Not all D&O policies are created equal! Some policies provide executives and employees as well as their spouses if they are named as co-defendants in a lawsuit. Some include defense costs inside the liability limit, while others provide defense costs outside the liability limit. These are two brief, but very important examples of coverage features that need to be considered when purchasing a D&O policy.

For more information on this topic or if you have any questions regarding the content in this article, please contact Patti Blaschka at Veitenhaus Insurance Services directly at 414-688-8900.